When migrating from the UK to Australia many individuals, that have accrued UK pension funds, take advice on a UK pension transfer to Australia – to transfer into an Australian QROPS (Qualifying Recognized Overseas Pension Scheme).
The benefits of a transfer to an Australian QROPS, from a UK scheme, is that at age 60 all payments from the Australian QROPS scheme in respect of the transfer, made to the member, are paid fax free.
If you migrate to Australia and do not transfer your pension to an Australian QROPS, then your private or company pension benefits would be paid to you directly from the UK scheme at retirement. Any permanent resident of Australia would be taxed at their highest marginal rate on this income (whether the income is received by them in Australia or not).
These rates, for tax year 2009/2010, are banded as follows:
A$1 to A$6,000 NIL
A$6,001 to A$35,000 15%
A$35,001 to A$80,000 30%
A$80,001 to A$180,000 38%
A$180,000 and over 45%
(The above rates do not include the Medicare Levy of 1.5%)
The tax year in Australia runs from 1 July to 30th June and the above rates would be subject to change on 30th June 2010.
Permanent residents of Australia with UK pension benefits, that are coming up to retirement, should consider a UK pension transfer to Australia – if they have not done so already – as a way of reducing the tax that they have to pay on their income in retirement.
For more information on Australian QROPS, speak to an adviser at Global QROPS Ltd.
